Labeau Products, Ltd., of Perth, Australia, has $34,000 to invest. The company is trying to...
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Labeau Products, Ltd., of Perth, Australia, has $34,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Invest in Project X Invest in Project Y Investment required $ 34,000 $ 34,000 Annual cash inflows $ 9,000 Single cash inflow at the end of 6 years $ 60,000 Life of the project 6 years 6 years The companys discount rate is 14%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables.
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